A Note on Industrial Relations Code, 2020.

Area of Science:

• Labor Economics
• Industrial Relations Law
• Socio-legal Studies

Background:

• The Industrial Relations Code (IRC) of 2020 is a significant piece of legislation in India.
• It consolidates and amends laws relating to trade unions, conditions of employment, and industrial disputes.
• Understanding its impact on employment protection is crucial for businesses and workers.

Purpose of the Study:

• To analyze the changes in employment protection provisions within the IRC 2020.
• To compare the IRC 2020 with the Industrial Disputes Act (IDA) 1947 and its amendments.
• To quantify the impact of the revised factory-size threshold on affected factories and workers.

Main Methods:

• Comparative analysis of legislative provisions between IRC 2020 and IDA 1947 (including 1976 and 1982 amendments).
• Quantitative assessment using data from the Annual Survey of Industries (ASI) 2017-2018.
• Calculation of the percentage of factories and workers affected by the change in the threshold-size for employment protection.

Main Results:

• The IRC 2020 reinstates the factory-size threshold for employment protection to 300 or more workers, reverting from the 1982 IDA amendment's 100-worker limit.
• An estimated 7.07% of factories and 15.97% of workers are impacted by this threshold adjustment.
• The change significantly alters the scope of employment protection against layoffs, retrenchments, and closures.

Conclusions:

• The IRC 2020's revised threshold has a substantial quantitative impact on Indian industrial establishments and their workforce.
• The relevance of employment protection legislation, especially during the pandemic, necessitates careful consideration.
• Discretionary use and potential temporary expansion of IRC employment protection provisions may be warranted based on economic conditions.